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Walking the line

By ANTHONY HALL, United Press International   |   Nov. 2, 2011 at 8:53 AM   |   Comments

When you look up "put it all on the line" in the Guinness Book of World Records, henceforth, you will find the name George Papandreou.

He might have let his peers, the heads of state in Europe and beyond, in on what he was planning but apparently did not. He dropped the bomb Monday, saying that months of good-faith negotiations that were plenty forgiving given Greece's record fudging numbers would be put to a voter referendum.

"Let the people decide," he decided.

It could be said that two years of negotiations between Greece, the International Monetary Fund, the European Central Bank and the heads of states of 27 countries -- including entourages, aides, chauffeurs, fancy lunches, air travel from anywhere to Brussels and back, hotel accommodations, new suits for photo opportunities, phone bills, and all that in duplicate for finance ministers and their aides -- were tossed into the air with Papandreou's surprise announcement.

That isn't the half of it. Stock markets have leaned lower around the world since March, with most of the initial downturn provided by weak economics -- a downturn in manufacturing, a housing hangover -- but then, with increasing focus, it became apparent that the indulgences of Greece, one of the smallest economies in the 17-member eurozone, was weighing heavily on euro, dragging down major banks in France, Germany and elsewhere, and threatening the stability of an entire continent. A disorderly default in Greece, finance ministers warned, could drag down Spain, Italy, Ireland, Britain -- wherever there was too much frailty or too much sovereign debt.

It's not like Athens didn't get the memo. General strikes shut down the country on numerous occasions, most of them timed to accentuate the obvious: The series of austerity measures taken up in Parliament -- each of them a business section's lead story -- were not very popular. The last general strike included a protest crowd of some 125,000 in Athens, the largest yet. Sporadic violence was recorded, most of it, apparently, by marauding youths.

What's on the line with the plan to ask Greek voters whether or not to accept the international rescue plan?

Papandreou's job, of course. Greece's membership in the eurozone -- check. The value of the euro, which means the economic stability in Germany, France, the Netherlands, Spain, Italy -- all those guys. Billions of dollars of investment in Greek debt by European banks. The international rescue fund.

Anything else? How about respect for Greek politics?

That is a trickier than it seems, because the referendum, frankly, is the right thing to do. The deeper Greece goes into the debt to the troika -- the European Central Bank, the European Commission and the International Monetary Fund -- the further hobbled they become and the further beholden to its well-intended European neighbors.

But how well-intended are Greece's eurozone brethren? Not very. With the size of Greece's problems, Europe could have bailed Greece out a few times over. Instead, they dithered for months -- fiscal problems in Athens surfaced in February 2010 -- and ended up with punishing loans meant to salve the political tensions a true bailout would have created in their home countries. Wake up and smell the olive oil. Europe painted itself into a corner, many say, when the euro was launched in 2001 -- a currency without a cooperative, that is to say federal, tax system to back it up.

In fact, it would be honorable for Greek voters to turn down the bailout program. Not very smart, perhaps, but honorable.

In international markets Wednesday, the Nikkei 225 index in Japan dropped 2.2 percent while the Shanghai composite index in China added 1.3 percent. The Hang Seng index in Hong Kong rose 1.8 percent while the Sensex in India dropped marginally, off 0.09 percent.

In Australia, the S&P/ASX 200 shed 1.1 percent.

In midday trading in Europe, the FTSE 100 index in London lost 0.35 percent while the DAX 30 in Germany gained 1.1 percent. The CAC 40 in France rose 1 percent while the Stoxx Europe 600 index was flat, up less than 0.1 percent.

© 2011 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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